How Location-Based Social Networks Are Changing the Game for Businesses New trends that are altering the way brick-and-mortar companies do business.
By Brian Honigman Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Combining mobile and location-based services, social tools such as Foursquare and Yelp have been changing the way customers interact with the physical location of a business. These services offer more information for consumers, helping them make more informed decisions on where to eat, sleep, shop and relax.
But a new crop of location-based social startups has emerged, going beyond the initial wave of innovations to build upon the experience of a customer who is about to visit or is currently visiting a business.
From a company that provides indoor GPS services to another that curates social information about specific neighborhoods, here are three new trends and the startups that are changing the way brick-and-mortar companies do business:
1. Indoor location based services. GPS is most commonly known for being used outdoors, but Boston startup ByteLight has taken that idea and applied it to analyzing the movements of customers indoors. ByteLight integrates with the LED lighting already present in a building to track the movements of customers in your business based on their mobile device. A customer then uses one of the apps developed by ByteLight to navigate and engage with a business by either receiving relevant coupons, ads or more based upon their location.
Related: Apple vs. Google Maps Battle Revs Up Local Search Options
ByteLight's take on location-based marketing aims to bring together online and offline content like delivering deals or coupons once a customer reaches a certain location in-store, as well as analyzing the patterns in the movements of customers so owners can create new ways to interact with them. ByteLight licenses its product to LED manufacturers, so the cost of their services varies based on the size and scope of the installation.
2. Socially curating neighborhood demographics. A research project at Carnegie Mellon University in Pittsburgh called Livehoods aims to track information from 18 million public tweets and check-ins to collect geographic and demographic data about a location and the person visiting that location, essentially to tell the story of neighborhoods of a city. These snapshots of the various areas could potentially give businesses a way of targeting their product and advertising to the right customer based on the demographics of a region.
So far, Livehoods has mapped neighborhoods in seven cities in the U.S. and Canada [http://livehoods.org/maps]. Businesses can use these maps for free to bolster the targeting of their advertising and learn more about the regions that mean the most to their customer base. The project is still in its beginnings, but potential is there to someday provide businesses with demographics, economic development, resources and other valuable data about a local area.
3. From leather wallet to mobile wallet. With new platforms like Gyft, Passbook and Google Wallet offering consumers the ability to hold all of their gift cards, gift certificates, tickets, coupons and more in their phones, businesses have an opportunity to interact with their customers in a new arena with little competition. Engage customers with special offers and discounts only accessible from their mobile wallet and only redeemable in stores.
By marketing to customers through their mobile wallets, there's the opportunity to provide hyper local content that leads to more relevant advertising and, ideally, more business for your company.
Related: Foursquare's Dennis Crowley on Building a Massive Community
